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Monster Week In Review

What a week for earnings, Apple, Tesla, Qualcomm, and Facebook. Then there was Broadcom upping the high end of guidance, then rumors swirl Broadcom was going to buy Qualcomm. Acadia Pharmaceuticals reported the highly anticipated data from its Alzheimer Psychosis trial.

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Apple

Apple was the most significant news of the week with quarterly results that were better than expectations. On of top of that, the company upped guidance for the fiscal first quarter. Results sent shares of the stock higher on Friday, with the price breaking above previous resistance levels.

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Qualcomm/Broadcom/Brocade/NXP

Qualcomm shares jumped by nearly 13 percent on Friday after reports surfaced that Broadcom was interested in making a bid for Qualcomm. Bloomberg reported the deal could be for $70 per and a mix of cash and stock.

Broadcom shares jumped too on the news to an all-time. The deal would be massive and would likely to face some regulatory hurdle, just given the size and market share of each of the companies. It also seems more than coincidental the announcement surfaced the day after Broadcom announced it would redomicile the company back to the US, from Singapore. The announcement was made, mind you from the Oval Office, regarding the move. Also, I’m not sure why Broadcom would want to get in the middle of Qualcomm’s on-going litigation with Apple. Broadcom is a major supplier of chips to Apple as well.

Additionally, if Qualcomm has the guts to challenge it’s the biggest customer, in Apple, and the largest company by market cap, in litigation, it has to make one wonder why Qualcomm would be willing just to give itself away.

Of course, there is the whole on-going Broadcom acquisition of Brocade and Qualcomm’s acquisition of NXP Semi. Shares of NXP fell on the news because of the risk of the deal being canceled. Shares of NXP dropped from around $118 to nearly $115. But in reality it could be a win-win for NXP, first Qualcomm would need to fork over $2 billion to NXP, and then NXP can go back to being the dominant player in near field communication and automotive chips

Tesla

Tesla shares finish the week at $306, after falling below $300 in Thursday’s trading session. Tesla shares of the stock ended below the 200 days moving average too. But the stock did find support and tested the $290 level. We’ll see what next week brings.

Facebook

Facebook shares pulled back a little bit after reporting strong results, but the stock looks more than fine from a technical view.

Acadia Pharmaceuticals

Acadia reported the full data from its trial of Alzheimers Disease Psychosis trail published last December. The data looked very strong and encouraging for pimavanserin’s future use as a treatment in Dementia-related-psychosis. The most impressive feature of the data set was the effect the treatment had in patients with more severe levels of psychosis. Most importantly, the safety profile continued to be strong. Acadia reports quarterly this coming Tuesday after the close of trading. The future for the development of pimavanserin and the company look very bright.

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Michael Kramer and the clients of Mott Capital own shares of TSLA, NXPI, ACAD

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